Teachers Pension Fund has indicated interest in international investments in equity securities and has requested Alpha Seekers to consider the UK equity market

Subject:BusinessPrice:9.82 Bought3

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Teachers Pension Fund has indicated interest in international investments in equity securities and has requested Alpha Seekers to consider the UK equity market. Alpha Seekers has indicated that such a portfolio would also require the use of different derivative contracts to manage risk and that generally it prefers to use exchange-traded derivatives to over the counter (OTC) contracts. Further Alpha Seekers identified Intercontinental Exchange (ICE) and Eurex Exchange as the two potential organised trading markets to consider for trading derivative contracts for managing risk of Teachers Pension Fund's potential investment portfolio. 

 

Required:

 

A. Identify the features of futures on BT Group listed on ICE and Eurex Exchange. Compare the differences between ICE and Eurex options on BT Group.                                                                              

 

B. Assess futures and options listed on both ICE and Eurex markets and the features of available derivative contracts on BT Group & recommend which market should be used for trading.